In the decision of Westfield Management Limited v AMP
Capital Property Nominees Limited  HCA 54, the High
Court concluded that members of a managed investment scheme cannot
bargain away the rights conferred by Chapter 5C of the
The decision concerned a dispute between unit-holders in a
managed investment scheme. The appellant, Westfield Management
Limited as trustee for the Westart Trust (Westfield) held one third
of the units in a trust registered as a managed investment scheme
under Chapter 5C of the Corporations Act 2001
(Cth)(Scheme). AMP Capital Property Nominees Limited (AMP) held the
The sole property held by the Scheme was a shopping centre in
AMP wished to sell the shopping centre.Westfieldwanted the
shopping centre to remain with the Scheme.
The unit holders and the Responsible Entity (AMP Capital
Investors Limited) had entered into an agreement which provided,
amongst other things, that the Responsible Entity could not sell
the shopping centre without the written consent of the unit holders
and that unit holders must exercise their voting rights to give
effect to the intent and effect of the agreement (Consent
To get around the Consent Clauses, AMP exercised its right under
Section 601NB of the Corporations Act to call for a
meeting of unit holders to vote on the winding up of the Scheme. An
inevitable consequence of the winding up of the Scheme would be the
sale of the shopping centre and, as AMP held more than 50% of the
units, it was in a position to carry that resolution.
Westfield sought and obtained an injunction at first instance
preventing AMP from voting on the resolution without the prior
consent of Westfield.
The decision was overturned in the New South Wales Court of
Appeal. The Court of Appeal found that the restriction in the
Consent Clauses on selling the shopping centre did not apply to
winding up of the Scheme and therefore AMP would not be voting
against the "intent and effect" of that restriction by
voting to wind-up the Scheme.
Westfield appealed that decision to the High Court.
The High Court judgment
The High Court dismissed Westfield's appeal. It agreed with
the Court of Appeal's construction of the Consent Clauses.
Although the decision ultimately turned on a question of
construction, the High Court used the decision to express some
significant views about the ability of members of managed
investment schemes to bargain away the rights granted to them by
Chapter 5C of the Corporations Act. There is no express
restriction in the legislation that such rights cannot be
contracted out of. However, the High Court stated that where the
rights bestowed by legislation are a matter of public interest,
such as those provided by Chapter 5C, an attempt to contract out of
those rights would be invalid.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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